Freeman

OUR ECONOMIC PAST

Madison's Veto Sets a Precedent

The Founding Fathers First Asked Whether Government Spending Was Constitutional

JANUARY 01, 2008 by BURTON FOLSOM

Filed Under : Government Spending

Today, when a president looks at a spending bill that has passed Congress, he typically asks, “How will this help my party gain votes?” and “What interest groups will this bring to my side?” Sometimes, when modern presidents are more philosophical, they ask, “Will this spending help the economy, or advance the nation’s interests?”

Our first presidents approached spending bills very differently. The first question they usually asked was, “Is this spending constitutional?” Only if the answer was yes would they then ask if it was wise, if it would benefit the nation, or if it would gain votes.

These early presidents viewed the Constitution as a binding document that separated the powers of government for a purpose. Only if power were decentralized, they argued, could tyranny, high taxes, and government oppression be avoided. Thus Article 1, Section 8, of the Constitution restricted the power of Congress to spend taxpayer dollars to a limited number of items, mainly national defense.

An example of how early presidents adhered to the Constitution—even when it would have been politically expedient to do otherwise—is the issue of federal aid for internal improvements, the building and improving of roads, canals, and waterways in our new nation. The Constitution does not grant Congress the right to appropriate funds for roads and canals. The Founders did recognize that improving our highways was essential for economic development, but they believed that states or private companies should do the work; neither good government nor just results occurred when the people in Georgia could be taxed to build a canal in New York.

The problem, of course, is that congressmen in New York had incentives to argue that federal funds could be used profitably and in the national interest to build the Erie Canal. Since votes in the large state of New York were pivotal in many presidential elections, our early presidents had to decide whether to chase votes or follow the Constitution. Sometimes our presidents failed the test. For example, President Thomas Jefferson supported the construction of the inefficient National Road from Maryland to Illinois.

James Madison, who followed Jefferson as president, seems to have supported the National Road, but he learned from the experience. He directly confronted the issue of federal aid to internal improvements in his next-to-last day as president. Congress had passed what was labeled the Bonus Bill of 1817, which would have used federal funds to build roads and canals across the nation. Madison responded with a thundering veto. “I am constrained,” he said, “by the insuperable difficulty I feel in reconciling the bill with the Constitution.”

Madison admitted the bill would probably help his country, but then he observed that “such a power is not expressly given by the Constitution . . . and can not be deduced from any part of it without an inadmissible latitude of construction and a reliance on insufficient precedents.”

The promoters of the bill in Congress had argued that building roads and improving rivers at federal expense would “render more easy and less expensive the means and provisions for the common defense.” Madison retorted: “To refer the power in question to the clause ‘to provide for the common defense and general welfare would be contrary to the established and consistent rules of interpretation.” He added: “Such a view of the Constitution would have the effect of giving to Congress a general power of legislation instead of the defined and limited one hitherto understood to belong to them, the terms ‘common defense and general welfare’ embracing every object and act within the purview of a legislative trust.”

Madison concluded that twisting the General Welfare clause in this way “would have the effect of subjecting both the Constitution and the laws of the several States in all cases not specifically exempted to be superseded by laws of Congress.”

These words from Madison carry exceptional weight because he was a chief architect of the U.S. Constitution. At the convention in Philadelphia in 1787, Madison sat in front of the presiding officer. He never missed an important speech, and he took copious notes on the proceedings. When he says that the General Welfare clause cannot be used to give Congress “a general power of legislation instead of the defined and limited one,” he is echoing the original intent of the Founders.

Even so, Madison’s veto may have surprised Congress because earlier he had conceded that “establishing throughout our country the roads and canals . . . can best be executed under the national authority. No objects within the circle of political economy so richly repay the expense bestowed upon them.” Madison believed, however, that the country was better off following the Constitution rather than twisting its meaning to secure more rapid economic growth. If we want federal road-building, then pass a constitutional amendment to permit it.

Madison’s principled veto of the Bonus Bill of 1817 set a precedent that lasted for generations. The Erie Canal, for example, never received federal funds. In 1830, however, Congress tested the resolve of President Andrew Jackson with the Maysville Road Bill, which would have used federal funds to build a turnpike in Kentucky.

Jackson scrupulously followed Madison’s lead and vetoed the bill. Sure, the proposed turnpike might be economically sound, Jackson conceded, but if the country used federal funds to build a turnpike in Kentucky, “there can be no local interest that may not with equal propriety be denominated national.” He echoed Madison by adding, “A disregard of this distinction would of necessity lead to the subversion of the federal system.”

Madison and Jackson were also following George Washington’s advice in his Farewell Address. “[Avoid] the accumulation of debt,” Washington admonished, “not only by shunning occasions of expense, but by vigorous exertions in time of peace to discharge the debts which unavoidable wars have occasioned, not ungenerously throwing upon posterity the burthen which we ourselves ought to bear.”

Debt Retired

During Jackson’s presidency the United States fulfilled Washington’s request and retired all its national debt. In large part, Jackson argued, the new annual surpluses reflected the frugality exemplified by refusing to use federal funds for internal improvements. The government had raised a small amount of revenue each year through tariffs, the sale of land, and excise taxes, especially on whiskey. But the nation had followed the Constitution and limited spending mainly to national defense—two wars with Britain and occasional Indian removal.

In Jackson’s veto of the Maysville Road, he observed that on “the national debt we may look with confidence to its entire extinguishment in the short period of four years.” We were a nation “free from debt and with all her immense resources unfettered! What a salutary influence would not such an exhibition [of restraint] exercise upon the cause of liberal principles and free government throughout the world!”

James Madison, who lived to see the national debt removed, could point to his veto of the Bonus Bill as crucial in this achievement.


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January/February 2008

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BURTON FOLSOM

Burton Folsom, Jr. is a professor of history at Hillsdale College and author (with his wife, Anita) of FDR Goes to War.

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